Sep 202014

IG, one of the best-known spreadbetting and CFD providers, has branched out with a new execution-only stockbroking service. At present, the firm offers dealing in stocks listed in the UK, USA, Germany, Ireland and the Netherlands, with other international markets likely to be added in the future.

I’ve added a page with details of charges to the broker directory and also included it in the execution-only and international broker comparison tables. Overall, it appears to be a competitively priced service with a handful of particularly notable points: Continue reading »

May 092014

The long-running farce at UK broker Selftrade finally seems to be drawing to a conclusion. Parent company Boursorama announced in its Q1 results [PDF] that it plans to transfer all Selftrade accounts to Equiniti.

This isn’t a huge surprise, as it’s been obvious for some months that Boursorama was looking for an exit. Details are scant, but it doesn’t sound as if it expects to get much out of the deal.

Given that Selftrade was previously one of the strongest brands in the UK market, that’s testament to the amount of damage wrought by the year-long suspension on opening new accounts and the recent requests for very intrusive financial information from existing clients. The whole affair has been a masterclass in how to lose the trust of your customers.

Continue reading »

Feb 052014

Of all Hargreaves Lansdown’s new charges, the least popular with clients was the decision to levy a separate charge for holding investment trusts, whether in a dealing account, ISA or SIPP. Given the amount of criticism and illwill this has generated, it’s not entirely surprising to see that the firm has now changed its mind.

Investments trusts will now be bundled with shares, ETFs and bonds for custody fee purposes. There will be no charge for holding any of these in a dealing account. In an ISA, there will be a fee of 0.45% capped at £45, while a SIPP will incur 0.45% capped at £200.

There are still much cheaper providers for holding all of these assets for most investors (see the UK online broker comparison table for suggestions), but this certainly removes a very hard-to-justify charge and it’s good to see that clients were able to make the firm back down.

Nov 302013

Sippdeal – up to now one of the cheaper UK brokers for international dealing – has rebranded itself in an effort to shed its SIPP-only association, changing to the rather clunky-sounding AJ Bell Youinvest. More importantly, it’s announced a new charging scheme to bring its business model into line with the Financial Conduct Authority’s platform review and the resulting ban on execution-only brokers receiving trail commission.

Unfortunately, Youinvest has combined this with another rather unwelcome fee change that will be much more of an issue for international investors, even though few people seem to be picking up on it so far. Full details of all the changes are listed on the Youinvest website [PDF], but the key points are: Continue reading »

Apr 262013

The UK Financial Conduct Authority (FCA) – the new, allegedly improved successor to the FSA – has published the long-awaited “platform paper” setting out new rules on rebates of fund charges from fund managers to investment platforms.

This follows the Retail Distribution Review rules that came into effect at the beginning of the year, which banned financial advisers from receiving ongoing payments made by fund managers (a practice known as trail commission). The FCA will now bring in something similar for investment platforms, which are the intermediaries where the investor or adviser can access funds from many different fund firms in a single place.

These rules will radically alter the way that UK platforms and fund supermarkets charge for their services, since most currently rely on these rebates as some or all of their charges. In future, they will need to charge investors directly for their services.

For more background on how rebates and charges currently work, see this earlier article on RDR and unbundled pricing. Below is a quick summary of the FCA’s new rules and what they may mean for investors. Continue reading »

Mar 082013

As mentioned by users of this site and elsewhere, TD Direct Investing UK has informed non-residents in a number of countries that it will be closing their accounts. Japanese residents seem to be the most commonly affected, but some clients in the Middle East have apparently been told the same.

I had been expecting that the firm might start to steer non-residents towards TD Direct Investing International in Luxembourg (formerly known as Internaxx) instead of the UK arm, but it seems that some of the users who are having their accounts closed have been told that TDDII won’t accept them either.

Exactly what lies behind this isn’t clear – areas such as complying with money laundering regulations are an obvious possibility, but the underlying reason could be a wider drive to simply admin and cut costs. Regardless, the extremely short notice period means that many affected clients are understandably not very satisfied.

There’s a discussion on the UK stock broker accounts for non-residents post about alternative providers, although the choice among UK-domiciled brokers is likely to be slim.

Jan 232013

In recent days, a few people have noted that UK broker Selftrade has stopped opening new client accounts. The text on the account page has been reading “We are undertaking a review to enhance some of our processes, so we are unable to progress your application at this time”, which could mean anything.

Today, an article on Money Marketing sheds a little bit more light:

Execution-only platform Selftrade has stopped taking on new customers with the platform voluntarily varying its permissions following discussions with the FSA.

Exactly what’s going on is still not clear, but the involvement of the regulator will not reassure some users. For obvious reasons then, Selftrade is at pains to stress that whatever it is has not involved any losses to clients or the firm: Continue reading »

Jan 222013

Justin Modray of Candid Money has launched a rather useful new tool for UK fund investors: An interactive fund platform comparison that lets you check how much a given fund or basket of funds will cost you across multiple platforms and helps identify the best fund supermarket/discount broker combination for your needs.

So far there are six fund supermarket/broker combinations on there – Alliance Trust Savings, Bestinvest, Cavdenish Online, Clubfinance Frequent Trader, Interactive Investor and rPlan. Several others are on the way – ICICI and TD Direct Investing (which are both Cofunds brokers, like ICICI) and Sippdeal.

The notable omission is Hargreaves Lansdown, which has declined to take part. Given how uncompetitive its charges look these days, that’s no surprise.

It would perhaps be handy to have Saxo’s Modern Wealth Management service in there as well at some point, but other than that the tool covers all the providers currently included in the UK fund supermarket comparison table on this site.

Jan 152013

Anybody who follows the UK financial services services market will be well aware that the Retail Distribution Review (RDR) is set to shake up the financial advice model and the pricing of many investment services. But the UK isn’t alone in this – while RDR is the first major review to come into effect, a number of other countries have been looking at similar measures.

The FT has a recent piece on the pending commission ban in the Netherlands – it’s probably paywalled for most readers, but the first couple of lines give the gist:

Dutch banks are putting pressure on asset managers to review their fund ranges in light of a self-imposed ban on inducements that will debut in January 2014.

Managers say they must create share classes that have commission payments stripped out if they want to maintain their lucrative business ties with large distributors such as ABN Amro, Rabobank and ING.

It’s interesting to see that the Dutch banks (in the Netherlands, as in most continental European markets, banks are the main fund distribution channel) are being fairly proactive about this. That contrasts with the UK experience, where many parts of the industry have left things as late as possible: Some kind of ban on trail commission to discount brokers and platforms seems almost certain within a year and yet very few firms have introduced unbundled direct-to-consumer pricing.   Continue reading »

Jan 142013

Following reports about the Chinese regulator getting tougher on IPO candidates, the new measures already seem to be having the desired/feared effect. From Finance Asia today (and probably soon to disappear behind the paywall):

Only a day after China’s securities regulator announced it would closely vet the financial statements of listing hopefuls, companies started withdrawing their applications for new share sales.

Guizhou Zunyi Titanium, a titanium sponge producer, announced on Thursday that it would cancel its long-awaited initial public offering and has received confirmation from regulators on the withdrawal. Zunyi was the first company to scrap its IPO plans and more companies are expected to do the same.

Deloitte said earlier this month that about 20% to 25% of current IPO applicants on the mainland may withdraw or re-consider their listings in 2013. If that estimate is correct, up to 220 companies will cancel A-share IPOs this year, lowering the waiting list to 662 firms — still a big number.

Despite the disquiet of the brokers – who of course benefit from higher numbers of IPOs, regardless of the quality of the company – this is probably a good thing. A shortage of listed companies is not the main problem for the A share market.